A former oil company chief is waiting to be sentenced after being convicted of lying to investors about a North America oilfield. John O'Brien succeeded with a £7.2 million sterling (€11.4 million) rights issue for London-based Alliance Resources promising a fortune in natural gas was waiting to be drilled in Louisiana.

But by the April 1995 flotation to raise cash for the company, its flagship well, Valentine 14, was standing abandoned in a "duck pond" after drilling proved it dry and incapable of producing enough gas "to fill a cigarette lighter."

Alliance Resources had also had its lease to exploit 1,825 acres of the oilfield terminated.

The court heard that O'Brien engaged in deception to ensure money-raising on the stock market was a success. He hoped to protect the company stock price - including the value of his own shareholding hidden behind a "corporate curtain" of Manx companies - and "gloss over" the failure in Louisiana, while he hoped for new "exciting" ventures in Russia and Albania to come to fruition.

As a result, investors were defrauded, and company colleagues and professional City advisers - brokers Williams de Broe and solicitors McKenna and Co - were also taken in by the subterfuge.

After a four-month trial at London's Southwark Crown Court, a jury of six men and five women found O'Brien, of Midleton, Co Cork, guilty of two counts of forgery and two offences of false accounting between August 1994 and July 1995. They cleared him of one charge of forgery.

Judge Peter Fingret discharged the panel from returning verdicts on two further charges of forgery and two under the Financial Services Act after the jurors reached stalemate in their deliberations. The judge will sentence O'Brien, who now runs a hotel and restaurant business, in February. Mr Anthony Shaw QC, prosecuting on behalf of the Serious Fraud Office, said as well as investors being defrauded, brokers Williams de Broe, solicitors McKenna and Co, and company colleagues were taken in.

He said O'Brien falsely claimed Alliance held a lease to exploit 1,825 acres of land on the Valentine Sugars Plantation, and that company well Valentine 14 was producing significant quantities of natural gas. But Mr Shaw said that in reality the company's right to drill had been terminated and the well had been abandoned.

"The suggestion in the listing particulars that Alliance Resources had got title to 1,825 acres was untrue," said Mr Shaw. "As untrue was the statement that Valentine 14 was a productive, major and successful well."

The jury heard that under Stock Exchange rules, advisers needed to verify company claims before it went to the market, including sending representatives to Louisiana.

"If they had seen Valentine 14 in March 1995 sitting in a pond amid mud and debris, it would have been a disaster," said counsel.

"This was meant to be a fantastic well producing millions of cubic feet of gas a day." But O'Brien had a solution. "He instructed they be shown another well and pretend it was Valentine 14. The deception was successful." O'Brien, who claims to hold a master's degree in business studies from UCC, also made it appear that funds arriving in Alliance's Bank of Ireland account were from the sales of gas produced by Valentine 14. And the defendant, who began working in the oil industry in 1977, also produced a "white knight" for Alliance.

Progas Holdings was an O'Brien company - its name chosen to resemble Progas Inc, an American gas marketing company. Progas Holdings purchased a working interest in the oilfield from a United States citizen. It then sold the "partnership agreement" back to Alliance, claiming it was a good deal for the company, as it would maximise revenue. He instructed his secretary to prepare "cut and paste" letters from a fictitious Progas Holdings board to agree the sale - at an inflated price. And when a company representative was needed to appear in London to sign the agreement, O'Brien paid an associate to act out the role.

He later met his acquaintance in a pub to hand over the cash. O'Brien, who fell victim to a boardroom coup in November 1995, which prompted the police investigation, denied ever misleading anyone over the issue. He said proven reserves in the oilfield had made it a good prospect and he never claimed that Valentine 14 was producing. During his evidence, he maintained he had fallen victim to a fraud being run by a senior colleague.